France attracts a varied demographic for many compelling reason; for those looking to relocate with their family, France is famed for having one of the best education systems in Europe. For those looking to further their career or enjoy their retirement, there is something for everyone; whether it’s the bustling streets of Paris, to the wine and cuisine of Bordeaux, the history and culture of Brittany and Normandy, or the luxuries of the French Riviera.
Whilst these may sound irresistible, it is worth noting that France has one of the most complex and expensive tax regimes in Europe. Taking personalised advice is vital, especially in the ever-changing environment we now live in.
Our team of advisers will be able to provide you with a tailer-made personalised financial plan targeted at achieving your long-term financial goals. We will help you achieve your dream of becoming financially independent and give you the ability to make the most out your time in France.
Residency | tax rates
In most cases, if you move to France with the intention to stay on a permanent or indefinite basis, you become tax resident from the day you arrive. You will then be responsible to inform the French authorities of your arrival.
If you are considered a tax resident in France, you are subject to tax on your worldwide income, gains and real estate wealth.
You are considered a tax resident in France if:
Filing your tax return
Each year, it will be your responsibility to file a tax return. This can be done at your local tax office or online. In France, taxes are declared in arrears, so, for example, you would need to declare any income or gains earned in 2021 by the end of May 2022.
Normally, the deadline to file your tax return is by the end of May, however since the outbreak of Covid-19, deadlines have been extended to run into June. Tax return deadlines vary slightly each year and are announced in late spring of the same year the taxes are due.
Form 2042 is the main French tax return form, however in France, there are additional forms for different types of income which must be filled out to accompany your main French tax return form.
If you have paid French taxes before, you typically receive Form 2042 pre-filled, on which you should list your updated worldwide income and gains. Filing your tax return in French can be quite complex, especially if you earn income from different sources or are filing your French tax return for the first time. In such cases, we recommend that you consult a local tax accountant who will be able to assist you in the process.
For more information, please refer to the French Government website:
If you earn more than EUR 250,000 (or EUR 500,00 for married couples), there is an additional tax rate know as an ‘exceptional contribution’ of 3% over and above the progressive tax rate. This rises to 4% for individuals earning more than EUR 500,000 (or EUR 1,000,000 for married couples).
Investment income, interest, dividends and capital gains are taxed at a flat rate of 30% (12.8% being income tax, 17.2% being social charges). In certain circumstances, individuals can still use the progressive rates if this results in a more favourable outcome.
Income from Assurance Vies is also taxed at a 30% flat rate of tax (for Assurance Vies set up on or after 27th September 2017). The flat rate of tax is different for Assurance Vies set up before this date. In both cases, progressive rates can be used.
In France, income is taxed according to progressive rates of up to 45%:
INCOME TAX RATES
Up to €10,084
€10,085 – €25,710
€25,711 – €73,516
€73,517 – €158,222
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